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For the first time in the past 14 months, the pace of rent growth for single-family homes didn’t rise compared to the month before it in May.
That doesn’t mean the rent went down — not by a long shot. Rent still climbed 13.9 percent compared to May 2021 and remains at a record high, according to a look at rent growth in May from the property data company CoreLogic.
But it was the latest indication that the rental market could be starting to balance out after a historic run-up in prices.
“Increases in mortgage rates and high home prices can be headwinds to the for-sale housing market but may be continually pushing up single-family rents,” Molly Boesel, principal economist at CoreLogic, said in a statement.
Rent growth year over year in May matched April’s growth, according to the report. It was the first time since January 2021 that rent didn’t accelerate above the prior month.
“While the annual increase in the (Single-Family Rent Index) for May matched April’s growth rate, the gain remains at a record-high level,” Boesel said. “Furthermore, the month-over-month growth rate for rents in May was well above that month’s 19-year average.”
High home prices and rising mortgage rates priced out a pool of buyers who stayed in the rental market. That gave landlords the ability to continue hiking the price of rent after a long stretch of astronomical rent increases.
“Since rising interest rates are sidelining more prospective homebuyers, landlords have a larger pool of potential tenants and thus more leverage to raise prices,” the report said. “The year-over-year U.S. single-family rent price growth was more than twice the May 2021 increase and more than eight times higher than the May 2020 growth.”
Rent grew at 13.9 percent for a single-family home in April. That rate was more than double the year before and about four times higher than the historical average.
The CoreLogic report is a look at the single-family rental housing market nationwide. It comes a week after the multifamily giant CoStar found that the pace of growth for multifamily rentals had also begun to slow.
Price growth by rental type
- Lower-priced (75 percent or less than the regional median): 14.3 percent growth, up from 4.7 percent in May 2021
- Lower-middle priced (75 percent to 100 percent of the regional median): 14.6 percent growth, up from 5.4 percent in May 2021
- Higher-middle priced (100 percent to 125 percent of the regional median): 14.7 percent growth, up from 5.8 percent in May 2021
- Higher-priced (125 percent or more than the regional median): 13.2 percent growth, up from 8.2 percent in May 2021
Biggest year-over-year growth by city
- Miami: 39.5 percent growth
- Orlando: 24.8 percent growth
- Las Vegas: 16.7 percent growth
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